Jan. 26 (Bloomberg) -- Advantest Corp., the world's biggest maker of memory-chip testers, lowered its forecast for full-year net income 4.6 percent on price declines for flash memory and slack demand for chips used in liquid-crystal displays.

Net income will probably be 41 billion yen ($337 million) in the year ending March 31, compared with a previous forecast for 43 billion yen and with 41.4 billion yen a year earlier, the company said today in a statement.

Advantest, which gets almost 60 percent of its revenue from machines that test memory chips, is trimming its profit outlook a second time this fiscal year as companies that make microprocessors and other non-memory chips are cutting investment. The company in October pared its annual net income forecast, citing reduced spending by Intel Corp., the world's biggest maker of chips that run personal computers.

``The demand for memory testers will probably continue to be strong, it's the non-memory business that's dragging them down,'' Yuichi Ishida, an analyst at Mizuho Investors Securities Co. in Tokyo, said prior to the earnings release. ``The attention is on how quickly the demand for non-memory testers recovers over the next few months.''

Net income in the three months ended Dec. 31 dropped 51 percent to 5.6 billion yen as sales declined 24 percent to 57.9 billion yen, the company said. Operating profit slid 56 percent to 7.9 billion yen from a year earlier.

Improvement Next Year

``Next fiscal year's results will be much better,'' Hitoshi Ohwada, Advantest chief financial officer, said at a briefing in Tokyo today. Sales and profit in the year starting April 1 will record ``double-digit growth,'' he said, without elaborating.

Operating profit this year will fall 5.4 percent to 61 billion yen as sales decline 5.5 percent to 240 billion yen, the company said. Advantest in October forecast sales and profit gains this year.

Orders for chip equipment, an indicator of future sales, fell 24 percent to 57.9 billion in the third quarter, from 75.7 billion yen a year earlier, the company said. Advantest expects orders in the January to March period to gain 16 percent to 71.9 billion yen.

To contact the reporter on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net.

Last Updated: January 26, 2007 03:13 EST